Live: onsemi Q1 Earnings Tonight. Can the Stock Continue Its 90% YTD Rally?

That wraps up our initial coverage of onsemi’s Q1 results. Thank you for stopping by!

Stay tuned for more updates from management’s earnings call at 5 PM EST.

With onsemi (NASDAQ:ON) trading near $98 after a 4% post-earnings drop, here is the refreshed setup.

Bull Case

• Q2 revenue guide of $1.535B-$1.635B tops the $1.53B consensus, confirming the stabilization narrative.
• Adjusted EPS guide of $0.65-$0.77 brackets above the $0.65 Street view.
• B. Riley’s $115 price target signals room above current levels if AI data center power scales.

Bear Case

• Adjusted gross margin of 38.5% remains far below the prior 45.3% peak.
• GAAP EPS printed -$0.08, reflecting ongoing restructuring drag.
• Shares sit well above the $75.17 average analyst price target.
• The day’s selloff echoes Q2 2025’s -15.58% beat-and-fade pattern.

Margins: The Real Story Behind the 4% Drop

The headline beat looks good, but the real story is in the margins, and that’s likely what’s pressuring the stock. Q1 non-GAAP gross margin came in at 38.5%, up slightly from 38.2% last quarter, but still well below the 40.0% level a year ago. So while margins are stabilizing, they’re not recovering fast enough to match the bull case.

Operating margin tells a better story. It jumped to 19.1% from about 13.1% in Q4, helped by lower restructuring costs, tighter spending, and a better mix as AI data center revenue grew more than 30% sequentially.

Management technically delivered on its 37.5%–39.5% gross margin guide, but bulls were expecting a clearer move back above 39.5%.

CEO Hassane El-Khoury said the business has moved past the cyclical bottom, which puts pressure on Q2 to prove margins can keep improving. Until utilization gets back into the mid-70% range, the case for multiple expansion depends heavily on AI mix continuing to improve.

onsemi CEO Hassane El-Khoury said the company has “moved beyond the cyclical trough on a path to recovery,” signaling that the worst of the downturn may now be behind it. That’s a meaningful change for a stock that has traded largely on cyclical concerns tied to autos and industrial demand.

Management highlighted that AI data center revenue grew more than 30% sequentially, pointing to accelerating demand across hyperscalers and chip vendors.

The rest of the business is still stabilizing:

• Revenue: $1.51 billion (slight beat)
• Gross margin: 38.5% (still below 40%+)
• Operating margin: 19.1%

Segment performance also reflects a transition. Power Solutions Group, which includes AI and power infrastructure, grew modestly, while other segments like automotive and industrial remained softer on a sequential basis.

If AI momentum continues while core markets recover, the story could improve for the stock. If not, the stock could be in for a slow cyclical rebound.

onsemi (NASDAQ:ON) just reported Q1 earnings, beating expectations on both revenue and earnings, but shares are moving lower following the release.

Here are the key numbers:

Revenue: $1.51 billion vs. $1.49 billion expected
Adjusted EPS: $0.64 vs. $0.60 expected

Other highlights:

• GAAP EPS: -$0.08
• Adjusted gross margin: 38.5%

Guidance came in slightly ahead of expectations:

• Q2 Revenue: $1.535–$1.635 billion vs. $1.53 billion expected
• Adjusted EPS: $0.65–$0.77 vs. $0.65 expected

Quick read:

• This was a beat on the headline numbers, with guidance also coming in ahead of Wall Street estimates
• Margins remain under pressure, and the outlook may not be strong enough to justify the stock’s recent run

Shares are down 6% following the report.

Why Tonight’s Guidance Matters More Than Results

Wall Street has already priced in a beat on Q1, so the Q2 and full-year guide will dictate the market’s reaction. onsemi (NASDAQ:ON) management has guided conservatively in 3 of the last 4 quarters, landing actuals inside the range each time.

What Could Push the Stock Higher

Q2 revenue guidance above $1.55B, non-GAAP gross margin trending above 40%, and explicit AI data center power dollar contribution. That would validate the stock’s 90.27% climb year-to-date.

What Could Send the Stock Lower

Flat-to-down sequential revenue, gross margin stuck near 38.2%, and cautious automotive or China commentary. With shares at $102.90 versus a $75.17 consensus target, soft guidance gives bears room to compress the multiple from a trailing P/E of 355 (forward P/E of 35).

Investors should also focus on Power Solutions Group commentary and utilization rates.

The Thesis Check: Bull vs. Bear Into Tonight’s Report

With onsemi (NASDAQ:ON) trading near $102.99 ahead of the 4:30 PM ET release, here is the balanced setup.

Bull Case

• Record $1.42 billion FY2025 free cash flow funds a $6 billion buyback.
• Management cited “increasing signs of stabilization” across automotive and industrial.
• vGaN wins and AI data center power exposure open a fresh growth vector.
• Polymarket implies a 93% beat probability.

Bear Case

• Q1 revenue midpoint of ~$1.485B sits below Q4’s $1.53 billion.
• Gross margin compressed to 38.2% from 45.3%.
• Trailing P/E sits at 355, well above analyst targets, which average $75.17.
• All three segments declined YoY, with Intelligent Sensing down 17%.

Prediction markets are leaning heavily bullish on onsemi (NASDAQ:ON). Polymarket’s active contract on whether the chipmaker beats Q1 non-GAAP EPS is pricing a 91.5% probability of a beat against 8.5% odds of a miss.

Liquidity is thin. Total volume sits at $1,983.25, with $803.13 traded in the past 24 hours and open interest of $1,616.25. The reference strike implied by the market URL is $0.61 non-GAAP EPS, sitting in the middle of management’s guided range.

That conviction tracks the historical record: onsemi has beaten EPS in 3 of the last 4 quarters, riding a 2-quarter streak. The crowd expects momentum behind the 90.27% YTD rally to extend.

Here is the full 90-day insider picture for onsemi (NASDAQ:ON) ahead of tonight’s Q1 report.

CFO Thad Trent sold 30,000 shares on three separate occasions in April, with sale prices stepping up from $80 to $93 and then to $100 per share. Director Paul Mascarenas made a small open-market purchase on April 3 at $62.19 per share, while CEO Hassane El-Khoury received 90,966 shares through an RSU award in February.

In total, insiders acquired 398,681 shares and sold 379,168 shares over the past 90 days. However, most of the buying came from non-cash RSU awards, which carry less signaling value than open-market purchases.

With shares now trading at $102.95, well above the $75.17 analyst price target, insider activity suggests management is taking profits rather than adding conviction ahead of earnings.

Potential Bull Case Triggers:

• Non-GAAP EPS above $0.66 with Q2 revenue guide above $1,535M
• Non-GAAP gross margin above 39.5%, signaling utilization climbing toward the mid-70s range
• AI data center commentary reaffirming high-teens sequential growth

Potential Bear Case Triggers:

• Revenue below $1,435M, particularly from weakness in the Power Solutions Group
• Weak gross margins
• Cautious automotive commentary

Wild Cards:

A $200M to $300M non-cash impairment from manufacturing restructuring, China, and tariff exposure flagged by Barclays at its $75 equal-weight initiation, and CFO Thad Trent’s three 30,000-share sales in late April at $80, $93, and $100.